5 questions with Stefanie O'Connell

Stefanie O'Connell is a millennial personal finance author and founder of her eponymous site.

It's a destination for millennial women who want to feel as confident with their money as they do in their lives.

Stefanie has been freelancing for 8 years and you can read all about how she got into the personal finance business here. We chatted with Stefanie a bit about how she makes her money moves. Here’s what she had to say:

What was the moment that you realized that financial independence was attainable for you?

When I qualified for my own apartment in New York City with my own credit, my own income, no guarantor and no roommates, I thought, wow, I've really made it. It might sound silly compared to people who consider financial independence having a million dollars or more in the bank. But for me, financial independence has always meant being able to live on my own terms. That is, not feeling limited in my life, career, or relationship choices because of money (or lack thereof). And that small upper west side studio of my own symbolized that for me.

What was it like and how did you feel at the time?

I felt simultaneously secure and liberated.

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Stefanie O'Connell

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What are the top three most important "money moves" people can make when trying to achieve financial independence?

Calculate your net worth. One of the biggest mistakes I see people make is using their income as the ultimate metric of their financial success, but the fact is, you don't own your income, you only own the part of your income that you keep, so net worth (that is, assets - liabilities, or everything you own minus everything you owe) is the true benchmark for measuring your financial health.

Focus on the BIG wins. We have a tendency to get bogged down in the minutiae of money - coupon clipping, latte skipping, etc - so much so that we often miss out on the big picture money moves that have the power to transform our financial lives. For example, improving your credit score to qualify for financing deals that can save you thousands of dollars over the life of a loan. Or something as simple as finding a way to reduce your housing cost by 30-40% (maybe by renting out a spare bedroom or moving to a cheaper part of town), can have a transformative impact on your monthly cash flow, compared to getting 30% off a pair of new shoes.

Don't rely on willpower, rely on systems. It's not enough to set goals and get specific with them, you have to put systems in place that commit your behaviors to your goals. For example, if you want to save $6,000 this year, don't rely on your willpower to make it happen. Automate a $500 deposit into your savings or investment accounts at the start of each month to make sure you're actually following through. Systems like this ensure that resolutions don't become an afterthought, sacrificed in favor of everything else that happens to be top of mind in the moment.

Do you think it's important to combine your personal value system with your decisions around money?

Absolutely. My entire philosophy around money management is based around the idea of maximizing value, as opposed to simply focusing on costs. The only real way to do that is to define your personal priorities and goals and ensure that your financial decisions align with those values.

What does this look like in your life?

Living in New York City is a personal value of mine. Is it the best decision for my bottom line? Of course not. But it's a priority for me, so I build my financial life around affording it, and sacrifice in other areas that I really don't care much about, like car ownership, salon treatments, and jewelry. This is what makes personal finance personal - which is why it's important to take rules of thumb (like spending no more than 30% of your income on housing) and to adapt them to YOUR goals, values and priorities (my NYC housing cost is greater than 30%, but I spend $0 on other major categories to make it work).

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